The slowdown in UK manufacturing was confirmed by a survey which showed firms wrestling with a loss of profitability and export orders.

According to the Chartered Institute of Purchasing and Supply, the sector failed to see growth pick up in February as the impact of the strong pound and high input costs continued to be felt.

The CIPS' key activity barometer recorded a mark of 51.8 last month - unchanged on the level for January when the manufacturing sector grew at its slowest pace for 18 months. The response of firms appeared to be a fresh round of redundancies to keep costs down.

It was nevertheless the 20th consecutive month the index has remained above the 50 mark that divides expansion and contraction.

Manufacturers were at least able to book orders quicker owing to a "robust improvement" in underlying domestic demand, CIPS said.

But this contrasted with the situation overseas where demand for UK goods continued to decline, with the index for new export orders stuck at 49.6 in February and showing only a slight improvement on a month earlier.

Firms blamed the latest drop in export business on the strength of the pound against other major currencies, which reduced their competitiveness in foreign markets.

The pound has rallied strongly against the greenback and broke through the $1.9 mark on February 21 before hitting its highest level for two months earlier this week.

Roy Ayliffe, director of professional practice at CIPS, added that firms were still operating in a "high cost environment" even though the rate of increase in input prices eased to a seven-month low in February.

Prices of energy, oil, metals, chemicals and plastics remained high and CIPS suggested that firms were becoming less profitable as operating margins were squeezed.

Output price inflation slowed to its lowest level for five months and significantly lagged the increase in costs of raw materials, CIPS said.